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California has lost nearly 40 percent of its factory jobs since 1990, mirroring national trends. But thanks to soaring productivity and clusters of high-tech companies, the state remains the countryâ€™s biggest manufacturing powerhouse, with the value added by its industries growing at twice the national rate.

A new report by the Los Angeles County Economic Development Corporation, a nonprofit research group, finds encouraging trends in a survey of Californiaâ€™s manufacturing data, offering a sober counterweight to widespread public hand-wringing over the stateâ€™s competitiveness and business climate.

â€śWe are optimistic about manufacturing in California,â€ť said Economist Christine Cooper, the reportâ€™s lead author. â€śThe state has great competitive strength in a wide variety of industries.â€ť

California is competitive in high-technology sectors, including semiconductors, computers, peripherals electronic components, communications equipment, and the sophisticated radar and satellite instrumentation used in aerospace, the report notes.

The state is also competitive in low-technology industries, such as apparel, beverages, machinery and food processing, it found.

Despite Texas Gov. Rick Perryâ€™s highly publicized efforts to poach California businesses, the Golden State beat out the Lone Star State in its contribution to the nationâ€™s manufacturing gross domestic product, 11.4 percent to 10 percent in 2012, the most recent year for which complete data is available. California had 1.25 million factory jobs; Texas had 863,568.

The 64-page report, titled â€śCaliforniaâ€™s Manufacturing Industries: Employment and Competitivenessâ€ť describes the dramatic industrial upheaval led by revolutionary advances in materials, an explosion of computing power and the globalization which has made it possible to move factories to countries with lower labor costs.

Perry Wong, a Milken Institute economist who specializes in manufacturing, praised the report for â€śillustrating that global trends are cutting into our manufacturing employment, but California maintains competitiveness domestically.â€ť

He said, however, that the conversation should turn to ways the state can improve its position.

â€śIs there something that we could do better?â€ť he asked. â€śOther states are gaining in auto equipment and aerospace. And in biotech, with our first-class universities, we could be even more competitive.â€ť

In California â€“ and globally â€“ far fewer workers are needed when products are designed, modeled and simulated digitally. An early example: Boeingâ€™s 777, the first â€śpaperlessâ€ť aircraft manufactured with only a single prototype.

â€śManufacturing is becoming a desktop capability,â€ť the report noted.

As Cooper, the reportâ€™s lead author, put it: â€śThe engineering may be done in the cloud, with a design team in Shanghai or San Jose, while the manufacturing may take place in Vietnam or Valencia, depending on who can deliver the quality needed.

â€śIn todayâ€™s modern factory, rather than a whole bunch of guys on the production line, you can have a couple of engineers and skilled technicians operate the plant. A single technician with a computer can monitor an automated line that runs continuous shifts, without breaks for coffee, lunch or vacation.â€ť

Even as manufacturing has hemorrhaged employment, software automation has spurred a dramatic boost in productivity, higher than any other sector of the economy. Nationally, manufacturing jobs have dropped by 33 percent since 1990, but output increased by almost 50 percent.

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